Henryk Grossman/Grossmann (1881-1950) was born in Kraków and studied law and economics in Kraków and Vienna. In 1925 he joined the Institute for Social Research in Frankfurt. He left Germany in the 1930s and returned to become Professor of Political Economy at Leipzig University in 1949. 1881 was a common year starting on Saturday (see link for calendar). ... 1950 was a common year starting on Sunday (link will take you to calendar). ... This article needs cleanup. ... U.S. Economic Calendar Economics at the Open Directory Project Economics textbooks on Wikibooks The Economists Economics A-Z Institutions and organizations Bureau of Labor Statistics - from the American Labor Department Center for Economic and Policy Research (USA) National Bureau of Economic Research (USA) - Economics material from the organization... Vienna (German: Wien [viːn]; Hungarian: Bécs) is the capital of Austria, and also one of Austrias nine federal states (Bundesland Wien). ... 1925 was a common year starting on Thursday (link will take you to calendar). ... The Institute for Social Research (German: Institut für Sozialforschung) is a research organization covering topics such as sociology and continental philosophy, best known as the institutional home of the Frankfurt School. ...   Frankfurt am Main? [ˈfraÅ‹kfÊŠrt] is the largest city in the German state of Hesse and the fifth-largest city in Germany. ... // Events and trends The 1930s were spent struggling for a solution to the global depression. ... The University of Leipzig is one of the oldest universities in Europe. ... 1949 is a common year starting on Saturday. ...

Grossman's key contribution to political-economic theory was his book, The Law of Accumulation and Breakdown of the Capitalist System, a study in Marxian crisis theory. It was published in Leipzig months before the Wall Street Crash of 1929. Crisis theory is a debate within the Marxian theory of political economy. ... Map of Germany showing Leipzig   Leipzig? [ˈlaiptsɪç] (Polish; Sorbian/Lusatian: Lipsk) is the largest city in the federal state (Bundesland) of Saxony in Germany. ... For the protest against the Communications Decency Act, see Black World Wide Web protest. ... 1929 was a common year starting on Tuesday (link will take you to calendar). ...

Early life and education

Grossman was born into a relatively prosperous Jewish family in Kraków, then a part of Austrian Galicia. He was the founding secretary and theoretician of the Jewish Social Democratic Party of Galicia in 1905. At the end of 1908, he went to Vienna to study the marxian economic historian Carl Grunberg. With the destruction of the Austro-Hungarian empire at the end of World War I, Grossman became an economist in Poland, and joined the Polish Communist Party. This article needs cleanup. ... The Kingdom of Galicia and Lodomeria, or simply Galicia, was the largest and northernmost province of Austria from 1772 until 1918, with Lemberg (Lwów, Lviv) as its capital city. ... World War I was primarily a European conflict with many facets: immense human sacrifice, stalemate trench warfare, and the use of new, devastating weapons - tanks, aircraft, machineguns, and poison gas. ...

Career

From 1922 to 1925, Grossman was Professor of economics at the Free University of Poland in Warsaw. He emigrated in 1925 to escape political persecution. He was invited to join the marxian Institute for Social Research in Frankfurt by his former tutor, Grunberg. 1922 was a common year starting on Sunday (see link for calendar). ... 1925 was a common year starting on Thursday (link will take you to calendar). ... The Institute for Social Research (German: Institut für Sozialforschung) is a research organization covering topics such as sociology and continental philosophy, best known as the institutional home of the Frankfurt School. ...

Hitler's accession to power in 1933 forced him first to Paris, and then via Britain to New York, where he remained in relative isolation from 1937 until 1949. In that year he took up a professorship in political economy at the University of Leipzig in East Germany. Adolf Hitler Adolf Hitler (April 20, 1889 – April 30, 1945, standard German pronunciation in the IPA) was the Führer (leader) of the National Socialist German Workers Party (Nazi Party) and of Nazi Germany from 1933 to 1945. ... 1933 was a common year starting on Sunday (link will take you to calendar). ... 1937 was a common year starting on Friday (link will take you to calendar). ... 1949 is a common year starting on Saturday. ... The German Democratic Republic (GDR) (German: Deutsche Demokratische Republik), also commonly known as East Germany, was a communist state that existed from 1949 to 1990 in the former Soviet occupation zone of Germany. ...

Grossman's Law of Accumulation and Breakdown of the Capitalist System was finally made available in English translation in 1979 by Jairus Banaji, for an Indian Trotskyist organisation, the Platform Tendency. A recent edition is: ISBN 0745304591. However, it is a condensed version and lacks the important concluding chapter of the German original. This page refers to the year 1979. ...

Contribution to Theory

While at Frankfurt in the mid-1920s, Grossman contended that a "general tendency to cling to the results" of Marx's theory, in ignorance of the subtleties of "the method underlying Capital", was causing a catastrophic vulgarisation of marxian thought - a trend which was undermining the revolutionary possibilities of the moment. Karl Marx Karl Heinrich Marx (May 5, 1818 Trier, Germany – March 14, 1883 London, UK) was an influential German philosopher, political economist, and revolutionary organizer of the International Workingmens Association. ... Das Kapital (Capital) is a very large treatise of political economy written by Karl Marx in German. ...

The Law of Accumulation was his attempt to demonstrate that marxian political economy had been underestimated by its critics - and by extension that revolutionary critiques of capitalism were still valid. Amongst other arguments, it sets forth the following demonstration (for a complete definition of the terms employed, the whole book is recommended): In common usage capitalism refers to an economic system in which all or most of the means of production are privately owned and operated, and where investment and the production, distribution and prices of commodities (goods and services) are determined by the influence of market forces (in a free market...

The logical and mathematical basis of the law of breakdown

... Apart from the arithmetical and logical proofs that we have been given already, mathematicians may prefer the following more general form of presentation which avoids the purely arbitrary values of a concrete numerical example.

Meaning of the symbols

c = constant capital. Initial value = c_o. Value after j years = c_j
v = variable capital. Initial value = v_o. Value after j years = v_j
s = rate of surplus value (written as a percentage of v)
a_c = rate of accumulation of constant capital c
a_v = rate of accumulation of variable capital v
k = consumption share of capitalists
S = mass of surplus value, being:

Ω = organic composition of capital, or c:v
j = number of years

Further, let

and let

The formula

After j years, at the assumed rate of accumulation a_c, the constant capital c reaches the level:

c_j = c_o.r^j

At the assumed rate of accumulation a_v, the variable capital v reaches the level:

v_j = v_o.w^j

The year after (j + 1) accumulation is continued as usual, according to the formula:

whence

For k to be greater than 0, it is necessary that:

k = 0 for a year n, if:

(Note this line follows the German original in Das Akkumulations- und Zusammenbruchsgetz des kapitalistischen Systems (zugleich eine Krisentheorie), because it is misspecified in the condensed English translation.)

The timing of the absolute crisis is given by the point at which the consumption share of the entrepreneur vanishes completely, long after it has already started to decline. This means:

whence n =

This is a real number as long as s > a_v

But this is what we assume anyway throughout our investigation. Starting from time-point n, the mass of surplus value S is not sufficient to ensure the valorisation of c and v under the conditions postulated.

Discussion of the formula

The number of years n down to the absolute crisis thus depends on four conditions:

1. The level of organic composition Ω. The higher this is the smaller the number of years. The crisis is accelerated.
2. The rate of accumulation of the constant capital a_c, which works in the same direction as the level of the organic composition of capital.
3. The rate of accumulation of the variable capital a_v, which can work in either direction, sharpening the crisis or defusing it, and whose impact is therefore ambivalent.
4. The level of the rate of surplus value s, which has a defusing impact; that is, the greater is s, the greater is the number of years n, so that the breakdown tendency is postponed.

The accumulation process could be continued if the earlier assumptions were modified:

1. the rate of accumulation of the constant capital a_c is reduced, and the tempo of accumulation slowed down;
2. the constant capital is devalued which again reduces the rate of accumulation a_c;
3. labour power is devalued, hence wages cut, so that the rate of accumulation of variable capital a_v is reduced and the rate of surplus value s is enhanced;
4. finally, capital is exported, so that again the rate of accumulation a_c is reduced.

These four major cases allow us to deduce all the variations that are actually to be found in reality and which impart to the capitalist mode of production a certain elasticity ...

Much of the remainder of Grossman's book is devoted to exploring these "elasticities" or counter-crisis tendencies, tracking both their logical and their actual, historical development. Examples of each would include:

1. Depressed interest rates, investment capital transferred to unproductive speculation, eg housing stock, art objects.
2. Enlarged state sector bleeds value from the accumulation process via taxes. Wars destroy capital values.
3. 'Reserve army' of labour (unemployed) created to discipline wage claims.
4. Imperialism

Influence

Grossman's work has been of slight influence beyond the small fraction of the many Trotskyist political currents that have maintained awareness of it. Trotskyism is the theory of Marxism as advocated by Leon Trotsky. ...

Paul Mattick's Economic Crisis and Crisis Theory published by Merlin Press in 1981 is an accessible introduction and discussion derived from Grossman's work. Paul Mattick (1904-1981): Born in Pomerania in 1904 and raised in Berlin by class conscious parents, Mattick was already at the age of 14 a member of the Spartacists Freie Sozialistiche Jugend. ...

External Links

• Rick Kuhn 'Capital development' Socialist Review 245, October 2000. A short biography of Henryk Grossman.

• Preprint version of Rick Kuhn 'Economic crisis and socialist revolution: Henryk Grossman’s Law of accumulation, its first critics and his responses’ Paul Zarembka and Susanne Soederberg (eds) Neoliberalism in crisis, accumulation and Rosa Luxemburg's Legacy: Research in Political Economy 21 Elsevier, Amsterdam 2004 pp. 181-22. A discussion of aspects of Grossman's contribution to the Marxist theory of economic crisis.